By Amanda McKnight amcknight@swpub.com
Sep 26, 2017 http://bit.ly/2y6E3Jb
A company contracted by Prior Lake-Savage Area Schools to provide facility maintenance services is suing the Star Tribune Media Company and City Pages for defamation.
Nexus Solutions filed a complaint against the media company, which owns City Pages, in the Hennepin County Fourth Judicial District on June 2. City Pages reporter Cory Zurowski is also named as a defendant in the complaint.
Nexus and its owners, Michael David and Brent Jones, allege three articles written by Zurowski in January, February and March contain false and defamatory statements.
In his January article, Zurowski wrote that Nexus collected nearly $9 million in fees and bonuses from overseeing a $35 million project for the Prior Lake-Savage Area School District. According to the complaint, Nexus never collected bonus money. The complaint also states the company’s fees from the $35 million project equaled 15 percent, or $5.3 million.
According to District 719 Director of Communications Kristi Mussman, that $5.3 million was paid to Nexus and all the project’s sub-consultants, like architects, engineers and construction managers.
The $35 million project in question was actually a series of projects; the district entered into a $22.2 million agreement with Nexus in 2012 for the company to execute the district’s long-range facilities maintenance plan, according to Mussman. The board later voted to add the Prior Lake High School addition and other projects to the agreement, raising the cost to $34.8 million, Mussman said.
Zurowski’s article stated Nexus’ fees for last year’s proposed $150 million referendum, which failed, were estimated at 15 percent of the total budget, or $22.5 million. According to the complaint, Nexus’ fees were never estimated at that amount.
According to Nexus’ contract with the district, had the 2016 referendum passed, Nexus would have received compensation computed at 2.25 percent of the total program cost, 7.95 percent of architectural costs, 8.95 percent of engineering costs, 2.5 percent of commissioning cost and 5.75 percent of the total construction cost for construction management services. The district estimated that Nexus would receive about $14 million for its work on the project, which together would equal about 9 percent of the total 2016 referendum.
Nexus owners take issue with Zurowski’s claim that Nexus’ contract with Prior Lake-Savage Area Schools was never explained to the public, as well as his claim that the school district paid Nexus a “king’s ransom” and found gold in Minnesota school districts.
“Nexus was not paid a king’s ransom,” the complaint states. “The project was fully explained to the public; the project was not defended with impunity; Nexus did not find gold in Minnesota schools.”
In Zurowski’s March article titled “A consultant makes bank while Duluth schools continue to suffer,” he wrote about contract work done for Duluth Public Schools by a company called Johnson Controls, where both David and Jones were employed prior to founding Nexus Solutions.
Zurowski’s article says Johnson Controls promised $5 million in operational and energy savings as part of a multiple building overhaul in Duluth, but instead the district is dealing with yearly deficits. Zurowski attributed the information to Duluth School Board member Art Johnston.
In the complaint, David and Jones refute Zurowski’s statement that Johnson Controls’ promise of $5 million in annual savings was not fulfilled. They say the stories convey that David and Jones engaged in deceptive and fraudulent conduct in their dealings with the Prior Lake-Savage Area School Board, which they claim are false and defamatory statements.
The complaint also alleges Zurowski made the claims knowing they were false and “with a reckless regard for the truth.”
David and Jones asked City Pages to retract the defamatory statements, the complaint states, but City Pages has not retracted the stories. Thus, David and Jones say their reputations have been harmed and they are asking for reparations in the form of $50,000 each.
Zurowski declined to comment due to the pending litigation. The Star Tribune Media Company and Zurowski’s attorney, Leita Walker, also declined to comment.
”The Star Tribune does not comment on active litigation matters,” Walker said.
Attorney Patrick Tierney, who is representing Nexus, David and Jones, was out of the country when contacted for comment.